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MONDAY, MAY 12, 2008

INVESTORS.COM

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How companies implement flexible work arrangements

How companies view flexible work arrangements

Work Flex Gap Employers are coming up short in providing employees with flexible work arrangements. A survey says more are offering options like telecommuting and job sharing to retain talent. But many are inconsistent in implementing these policies.

The benefits of these programs match or outweigh costs of implementing them

98%

Programs boost employee engagement

66%

Programs improve worker retention Programs enhance employee recruitment

64% 49%

Have companywide, formal written policies Don’t measure effectiveness in any way Have policies that vary by unit, department or job description Offer arrangements at discretion of managers Have a formal employee application process

27% 71% 39% 31% 33%

Source: Hewitt Associates

MANAGING FOR SUCCESS LESSONS LEARNED

EXECUTIVE BRIEFING

Dropping A Lawyerly Mind-Set Aids A CEO

CUSTOMERS

Chief Execs Gird For Client Shifts A global study from IBM says that top executives are eyeing major investments in the next three years to meet changing customer demands. Overall, 83% of those surveyed expect big changes in dealing with customers in the future. IBMIBM says this represents a jump of 28% in just two years. These same chief execs say their ability to manage change is growing at a slower pace. The study is based on interviews with 1,130 CEOs from 40 nations and 32 industries. It sees two new classes of customer emerging in the next few years. One is the “information omnivore,” who craves all types of information and circulates his views via the Internet. The other is the “socially minded customer,” who bases purchases on corporate social responsibility issues. The survey says CEOs are planning a 22% investment boost over the next three years to serve information omnivores. They plan to invest 25% more in the same period to satisfy socially minded customers. CEOs

Pace Of Exiting Bosses Slows April proved to be a kinder month for chief execs in the U.S.: 11.1% fewer of them exited their posts vs. the same month a year earlier. Global outplacer Challenger, Gray & Christmas said in a survey that the 112 CEO job losses in April was 8.9% lower than in March, when 123 CEO changes were announced. Twenty-six CEOs resigned in April, making it the leading cause of CEO exits. “We are seeing a lot more movement among CEOs from one company to another,” said the outplacer’s CEO, John Challenger. “In this challenging economy, this could be a sign that more companies are luring coveted leaders away from competitors, or it could be a sign that CEOs are leaving their companies before things get too bad.” BABY BOOMERS

Rich Retirees Fear Recession One in four affluent 60-year-olds are changing their retirement plans and 40% are downsizing their lifestyle due to recession jitters. So says a survey by Bell Investment Advisors conducted in April. The findings indicate that firms selling to this well-heeled class of retirees may see weaker demand in the current downturn. The survey found that almost 30% of affluent boomers say they feel more financial stress now than six months ago. More than a quarter of respondents, who are in their late 50s or 60s, have either lost jobs in the last 12 months — or know someone 60 or over who has. SMALL BUSINESS

Workers’ Comp Knowledge Gap Many small firms seem to be spending money on workers’ compensation insurance without understanding the coverage they’re getting in return. A survey by small business insurance provider Employers found that 14% of small business owners and executives couldn’t name their insurer. It found that 13% didn’t understand how their insurance protects employees with work-related injuries, or how their coverage protects them against catastrophic claims.

A worker at an Oak Brook, Ill., McDonald’s shows a nonbiodegradable Big Mac container from 1975, left, and a current biodegradable one. McDonald’s switched to eco-friendly cardboard in the early 1990s. AP

The Art Of Making A Big Mac Go Green McDonald’s, others push pro-environment policies BY BRIAN WOMACK INVESTOR'S BUSINESS DAILY

Last year, Greenpeace activists climbed into rafts in the Amazon rain forest for a fact-finding tour about deforestation. That may not be surprising — except that the tour included four officials from one of America’s biggest and most visible corporations: McDonald’sMCD, which Greenpeace had earlier criticized for its potential role in the deforestation. The concern had been that McDonald’s suppliers were buying from soya farmers who Greenpeace says were harming the rain forest. But McDonald’s and Greenpeace worked together to find a solution about its suppliers. The previous year McDonald’s had come out against sourcing soya from the Amazon and also helpedpush a two-year moratorium for suppliers as well, McDonald’s officials say. “Where it makes sense we are going to use our size and influence to make a difference,” said Bob Langert, McDonald’s vice president for corporate social responsibility, who was on the trip and retold the story. Although McDonald’s isn’t new to the idea of green, it’s another example of how corporate America’s putting more time, more focus and more resources into the environment. Companies such as carmaker General MotorsGM, conglomerate General ElectricGE and oil company BPBP have even made it a recurring theme in ad campaigns.

“Green” Buoys Sales It’s more than just corporate responsibility, analysts say. More and more, consumers want to know the products they buy are made, distributed and sold with the environment in mind. While companies need to be careful not to overstate their green efforts, going green can buoy sales, analysts say. At the same time, cutting waste or packaging can cut costs. “American companies are finally getting this,” said Anthony Johndrow, a consultant with the Reputation Institute. “There’s a lot of money to be made in green.” A new study by IBMIBM says that 18% of chief executive officers view environmental issues or “green” as a concern — double the percentage from 2004. CEOs in Asia and Europe are leading the charge, though U.S.-based CEOs are increasing their focus

as well, the IBM study says. It’s old hat for many corporations that have seen green’s upside. Take Toyota MotorTM, which saw sales of its fuel-efficient hybrids in the U.S. jump 42% in April even as overall vehicle sales slipped 4.5%. Consumerpackaged goods maker General Mills has reduced Hamburger Helper’s package size by 20% with denser pasta shapes, saving the company in packaging and shipping costs.

McDonald’s Going Solar? McDonald’s has efforts that go farbeyondthe Amazon. The company, which also is using slimmer packaging, has been improving its restaurants and cutting

“Environmental sustainability is a very good thing to do. But it’s also the right thing to do with business.” Bob Langert, vice president for corporate social responsibility, McDonald’s

costs with more efficient lighting, energy-saving equipment and white (reflective) roofs. It’s building out “green laboratories” restaurants this year in Germany, France, Chicago and Japanwith features that could include reusing rain water for landscaping or adding more windows for natural lighting. There’s also talk about some restaurants using solar power, Langert adds. Langert points out a company as large as McDonald’s needs to ensure its supplies will be around for years to come. McDonald’shas worked with suppliers to ensure its fish is from companies concerned about sustainability. In Europe, it’s even reusing some of its cooking oils for fuel in its trucks. “Certainly environmental sustainability is a very good thing to do,” said Langert. “But it’s also the right thing to do with business. All these little things add up, and end up making a big impact.” He says the billions served by McDonald’s also want to know about the restaurant’s efforts. He points out one of the most visited parts of the McDonald’s Web site is the section on the company’s environmental efforts. “We know that customers care about these issues,” he said.

And how. BBMG, a marketing firm, says 90% of consumers have a favorable impression of the term “environmentallyfriendly.” “There is something going on,” said Raphael Bemporad, cofounder of BBMG. “More and more Americans are starting to consider both practical and environmental benefits when they make purchasing decisions.” In a survey released this year by marketing firm Cone LLC, nearly 6 in 10 American said they are consuming less or, at least, buying products that are environmentally friendly. Yet not every company should take the idea of green and launch a national ad campaign, Johndrow says. He says the marketing should line up with what the customers want in a given industry. For example, bank customers are more worried about the security of their money than whether their bank is using solar panels. “It boggles the mind why banks are spending millions on going green,” he said. “Don’t just jump on the bandwagon.” Bemporad says customers are more concerned about the issue when it’s closer to their personal well-being, such as health and beauty products. Still, he says more people are looking at environmental credentials across many sectors, including financial institutions. No matter the industry, companies must ensure they back up their green talk with the walk, he says. “There is more skepticism than ever,” Bemporad said. “They are going to have to not just make green claims, they’re going to have to take deeper green action across every decision point in their business.” Mike Lawrence, executive vice president of Cone, says companies are going to have to be increasingly careful about what kind of assertions they make to the public — or risk being tagged as “green-washing.” He says Americans aren’t as savvy as they thinkthey are about environmentalissues — but that will eventually change. “It demands a little bit of context and a little bit of humility,”he said. He says it’s fine for companies to market their environmental efforts, but not overstate them. For example, a company shouldn’t say it’s saving the world if it’s merely adding a few solar panels to its rooftops. “You’ve got to make the thing credible,” he said.

Do lawyers make good CEOs? Not necessarily, says Fay Vincent. He should know. A successful Washington, D.C., corporate attorney, Vincent became chief executive of Columbia Pictures in 1978. His lawyerly mindset didn’t serve him well. In his first few months on the job, Vincent operated like an attorney. He continually sought more information before making a decision. Hisslow, analytical approach resulted in several missed chances. “I was 39 and I had never run a business before,” said Vincent, who later became a senior executive at Coca-Cola and commissioner of Major League Baseball. “I learned you can’t wait around for as many facts as you’d like before deciding what to do.” Vincent sought to achieve an 80% degree of certainty, based on verifiable data, before making a key business decision. Yet collecting and scrutinizing so much information took a big chunk of his time. Herbert Allen, who ran Columbia Pictures, gave his new CEO some feedback. He told Vincent: “You can’t keep waiting for more data. We’ll live with your best judgment as long as your batting average is good.”

Act Decisively Vincent took Allen’s advice to heart. He dumped his overcautious approach and act more decisively. “I must have driven Herbert Allen crazy those first few months,” Vin-

cent said with a laugh. Comparing himself to a pitcher who’s afraid to throw the ball over the plate for fear that a batter might hit it, Vincent realized that he could no longer adopt a defensive stance.

Don’t Wait Vincent started to settle for a 60% degree of certainty when weighing big decisions. He discovered that he could make smart moves without as much data as he’d ideally like. A high-stakes takeover battle instantly tested Vincent’s mettle. As investor Kirk Kerkorian sought to take control of Columbia Pictures, Vincent confronted a torrent of critical decisions such as which attorneys to hire and what strategy to adopt to fight off the threat. “Icouldn’t afford to move too slowly or he’d (get) the company from us,” Vincent said. A few years later, Allen sold Columbia Pictures to Coca-Cola. As Coke’s vice chairman in 1985, Vincent had a chance to buy two TV shows from Merv Griffin: “Wheel of Fortune” and “Jeopardy!” “The question was would the shows last,” Vincent recalled. “How soon will they run out of gas? We figured three more years, so we bought them.” Vincent’s decisiveness paid off. Even without all the facts at his fingertips and many unknowns to sort through, he purchased the shows for more than $200 million. He says they still produce handsome profits today. Morey Stettner

SAVVY ENTREPRENEUR

New Workers Must Hit The Ground Running You interview job candidates and choose the most promising one. Now the real work begins. To ensure a new hire hits the ground running from Day One, craft a well-designed orientation program. Orchestrate how you introduce the newcomer to your employees and your company. Ideally, you want to welcome people aboard — and whet their appetite to excel — without overwhelming them. On their first day, have them tour the workplace rather than fill out forms.

to establish organizational clarity from the start.” Price also suggests administering behavioral style assessments to all staffers — new and old. Summarize each person’s results on laminated cards with their photo. “Each individual’s card should identify the best ways to communicate with them and what types of communication irritates them,” Price said. “That way, employees can exchange ‘trading cards’ with the newcomer.”

Distribute Packets “Get them to complete all the necessary paperwork before their first day,” said Ron Price, chief executive of Price Associates, a management consulting firm in Nampa, Idaho. “Give them an introductory packet beforehand so that they can turn in all the paperwork when they arrive. That frees up the day for them to meet people.” Your packet might include tax withholding forms, benefit explanation sheets and descriptions of your company’s drug-testing policy or ethics standards that all employees must read and sign. Provide the name and contact information of your human resources manager in case the employee has questions. Before you tour the facility with new hires, give them an organizational chart and a schedule for their first two weeks. Newcomers can glance at the chart to see how the co-workers they meet fit into the larger organizational structure. And the schedule of activities helps them know what to expect in the days ahead.

Leader Lunches “A leader should have lunch with thenew arrival on his first day to discuss the organization’s strategic vision,” Price said. “Often, business owners don’t communicate that vision to existing employees, much less to new ones. But it’s important

For example, employees may discover by exchanging their cards that one of them prefers honest, blunt communication but dislikes bossy or boastful speakers, while the other loves detailed analysis and well-organized arguments but dreadsdealing withpeople who gossip, miss deadlines or fail to deliver on their promises. Another tool to orient new employees is to give them clear, written position descriptions that specify your performance expectations. These documents should answer four questions: Why does this job exist, what results reflect superior performance, how will we measure success, and where can the newcomer go for help and resources? Morey Stettner

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